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Jun 30, 2022
Conduent Q2 2022 Earnings Report
Conduent's adjusted revenue decreased due to lower stimulus payments, unfavorable exchange rates, and lost business, while adjusted EBITDA also declined due to lower stimulus and lost business.
Key Takeaways
Conduent reported a decline in adjusted revenue and adjusted EBITDA for Q2 2022. The revenue decrease was primarily driven by lower non-recurring stimulus payments in the Government Services segment, unfavorable exchange rate movements, and lost business from prior years. The decline in adjusted EBITDA was attributed to the impact of lower government stimulus and lost business from prior years.
Adjusted revenue was $928 million, down 8.0% year-over-year (6.9% in constant currency).
Adjusted EBITDA was $87 million, with a margin of 9.4%, a decrease of 26.9% year-over-year.
New business signings ACV reached $180 million.
Net ARR Activity Impact (TTM) was $104 million.
Forward Guidance
Conduent provided its FY 2022 outlook, with adjusted revenue expected to be between $3.85 billion and $3.95 billion and adjusted EBITDA margin between 10.0% and 10.5%.
Positive Outlook
- New business ramp positions Commercial segment for full year growth in 2022
- Deal pipeline positions Commercial segment for full year growth in 2022
- Better client retention positions Commercial segment for full year growth in 2022
- Interest rate increases positions Commercial segment for full year growth in 2022
- New business ramp positions Transportation segment for full year growth in 2022
Challenges Ahead
- Volumes positions Transportation segment for full year growth in 2022
- Deal pipeline positions Transportation segment for full year growth in 2022
- Non-recurring payments run-off creates a large grow-over challenge in Government segment in 2022
Historical Earnings Impact
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Avg. Return Before/After Earnings
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